Business direction is never black and white. When faced with punishing trading restrictions through successive lockdowns, retailers have been forced to balance social responsibility with the need to keep trading – with mixed results. In this report, Paul Farley explores the ethical questions the industry has asked itself throughout the pandemic, and considers the long-term impact of actions both laudable and questionable …
From manufacturers turning out PPE to retailers raising funds to support those impacted by closures and job losses, Covid-19 has brought out the best in so many.
The Financial Times reported that as of June, British business had repaid £709m of Job Retention Scheme (JRS) monies to HMRC, homewares retailers IKEA and ScS among them – encouraged by its strong performance across the year, the latter repaid £3m in furlough grants.
When the pandemic hit, Dunelm furloughed 8000 staff, yet after putting them back to work in May to serve a boom in demand, the retailer saw a +29.7% increase in sales in Q3 alone, prompting it to return the £14.5m it had claimed in JRS monies, and to reject the offer of subsequent schemes and bonuses. Dunelm instead introduced its own, self-funded furlough equivalent, to protect vulnerable staff and those not working due to the restrictions.
Others made a point of going beyond the letter of lockdown law to help halt the spread of the virus. In January, as well as reducing the range of services it carried out in people’s homes, John Lewis suspended its in-store Click & Collect services, stating that it was conscious of “the increased need to remove reasons for non-essential travel during the current lockdown, to help encourage the public to stay at home”.
At the time, JLP’s executive director of operations, Andrew Murphy, said: “We’ve listened carefully to the clear change in tone and emphasis of the views and information shared by the UK’s governments in recent days. While we recognise that the detail of formal guidance has not changed, we feel it is right for us – and in the best interests of our partners and customers – to take proactive steps to further enhance our Covid security and related operational policies.”
Yet, for every example of responsible retailing, there was another that resisted Government guidance in its hunger to do business. In March last year, Mike Ashley refused to close Sports Direct, while opportunistically hiking the price of home exercise products – and in November’s lockdown, The Range, plus major flooring chains Carpetright and Tapi, remained open, courting controversy for their insistence on continuing to trade despite majoring in ‘non-essential’ goods.
Indeed, the regulatory wording was often ambiguous. In that first lockdown, the Government permitted ‘homewares’ retailers to reopen in May (guidance which was seized upon by various furniture retailers including Furniture Village, ScS, DFS and Barker & Stonehouse as a green light to trade) – only later clarifying that furniture retail instead fell within the ‘non-essential’ category, and should, in fact, wait until 15th June to do so. Having gone through the arduous and costly process of realigning their stores to meet the Government’s Covid-19-safe guidelines, those retailers already committed to reopening could perhaps be forgiven for going ahead and doing so.
Ultimately, I feel it’s impossible to discern, praise or condemn how businesses conducted themselves through those unprecedented times in any hard-and-fast manner. The decision to shut up shop started out as a matter of conscience, yet later became one of survival, prompting many to consider ways to operate (as safely as possible) within the grey areas of lockdown law.
But what does the trade think? I asked the members of our industry feedback panel to share their views on the ethics of trading through lockdown and treatment of furlough payments, and the possible long-term impact business’ decisions might have on their brand and customer loyalty – good or bad, when the dust finally settles, will their actions really matter?
Adam Ashborn, Reborn Marketing & Design: I can see both sides of the coin for why businesses would try to remain open and operational whilst others followed the Government guidelines and stayed closed/worked remotely. Unfortunately, some businesses don’t have the right setup to deal with running a business remotely, so taking up the furlough scheme would ultimately help them to survive the lockdown without hastily investing in new infrastructures and procedures to cope with the new working environments.
It’s difficult to argue either way, as businesses have done what they can to survive the lockdown – the last thing the Government needs is further business closures and a higher unemployment rate. We also need to keep in mind that some of these manufacturing businesses also stepped up to help support the Government during its time of need, with the production of masks, medical gowns, bedding equipment, etc.
Adam Hankinson, Furniture Sales Solutions: Having worked for Graham Kirkham for 20 years, I’m a fan of not following the crowd – but I think in general most people have done the right thing. Plus, a lot of the guidance was vague, so I’m certain some people were genuinely confused.
I think if you can afford to repay furlough then that’s very laudable, but to many it’s been their only way of surviving. For many businesses this has been (and continues to be) a knife edge, so as long as you aren’t deliberately doing things illegally or fraudulently, I understand that you have to do what you must to survive.
Dids Macdonald OBE, Anti Copying in Design: Like water, I always believe the truth finds its way. Ethics, compliance and respect should be part of our DNA as an industry. No-one likes a cheat or those who take the fast track to market by bending the rules to suit themselves– it’s corporately selfish. Whether it’s about IP, safety or sustainability, unless we demonstrate best practice, this has a negative impact on our industry. Increasingly, companies are finding that they have to ‘walk the talk’ on corporate social responsibility, and this is important – you can’t tick the box unless you deliver!
Emma Leeke, Leekes Retail: I personally found Ryanair’s behaviour shocking – there was no communication, a slow response, and I’m still chasing refunds. Sadly, there will always be a place for budget airlines, and convenience and price means I will no doubt continue to use them …
Gavin Boden, Rhenus Home Delivery (UK): I’ve seen the absolutes, both the cutthroat and the caring – but what we needed to do is put people before profit. And John Lewis did just that in January.
Lee Ness, Global Upholstery Solutions: We are part of a group, and I believe the way the group’s directors behaved was exemplary in how it treated staff and how ethical it was in making sure there was absolutely no possibility of abusing the relevant Government schemes. They could have used them a lot more, but didn’t.
I guess whether it matters is a question of perspective. Our business will not publicise what it did, because doing the right thing isn’t a marketing exercise – so, from an external perspective, probably not. But internally, people recognise the type of business they work for, and that makes a difference.
Mike and Karen Rowley, Core Products: Every business has to make their own ethical judgment on this – ultimately, is it best to help a customer who urgently needs a replacement mattress or high seat chair, or has been affected by a flood or some other misfortune? As they are surely deemed an essential purchase – as long as the transaction and delivery is carried out in the safest way for all.
I feel fortunate that all the companies who I had pre-bookings with were quick and efficient to refund and even extend loyalty status and expiry dates (American Express and British Airways deserve particular mention for their exceptional service).
Mike Murray, Land of Beds and AIS: We were really impressed with the decision made by supermarket giants such as Tesco and Morrisons to pay back their furlough payments. We are firm believers that good morals and social ideals are a pillar to business success, and they are also extremely important to customers and staff. Being a retail business, we were, and still are, very proud of all the frontline staff – delivery drivers, shop workers, and many more. They kept the country running, and should absolutely be considered essential workers.
Peter Harding, Fairway Furniture: I think that the behaviour of the two big players in carpets – Tapi and Carpetright – at the start of the second English lockdown was very poor, trying to remain open went against the spirit of what the lockdown was trying to achieve. Fortunately, pressure came from all sides and they were forced to back down and close.
I also think that some well-established and very reputable suppliers have really struggled to manage their way through the pandemic. Some have furloughed too many of their staff, meaning that retailers are left in the lurch dealing with upset customers. Others have used it as a means to increase prices far more than can be properly justified. It has been a very challenging period for retailers in terms of dealing with customer orders – something many suppliers simply do not see or appreciate.
Royce Clark, Grampian Furnishers: There have been many that have shone, and others that have sailed close to the wind. I think overall in the furniture trade we have been pretty responsible. However, if anything, some of the flooring nationals have let the trade down by pushing boundaries – locally, we had two of the national flooring retailers promoting home visits for measuring and estimating, and they were still carrying out non-essential flooring installations during lockdown.
Steve Adams, Mattress Online: The pandemic has been a learning curve for us all – it was unknown territory, and the definition of ‘essential’ has a lot to be desired. A socially distanced bed shop is forced to close, yet an off-licence selling alcohol and tobacco is considered essential?
Amongst the carnage there are always some heroes and villains. Mike Ashley’s Sports Direct debacle back in the first lockdown has not sat well with me. Tesco started the trend of paying back the Covid-19 business rate relief – after paying an enormous dividend, admittedly, but this still started a £1.8b rate repayment, which should be applauded.
Robert Bianchi, furniture retail veteran: I’m not sure I’d class any of the retailers as unethical in terms of how they approached lockdown – more that the Government guidance was open to interpretation.
In Lockdown 1, the interpretation of homewares being allowed to trade ensured that most furniture retailers in England opened their doors well before the official end of the lockdown date in June.
And in the last lockdown, my local Marks & Spencer was rightly open because they sold food – however, you could also buy clothes. There were similar examples with B&M and The Range. Likewise, garden centres were allowed to trade, but furniture businesses were not, even if they sold garden furniture.
Whilst I applaud those companies that have returned the furlough money – which morally and ethically was certainly the right thing to do – I don’t believe that will have a positive effect on consumers. Look at boohoo – criticised and castigated in the summer of 2020 over labour rates and a health and safety compromises in Leicester, they nevertheless reported a record +40% increase in the run-up to Christmas, and added Debenhams to their portfolio in Q1 2021.
My gut feeling is that whatever actions have been questioned or applauded, it’s now time to move on and put the last 18 months firmly behind us.
This report was published in August's issue of Furniture News.
